Fed's Brainard: Financial firms should be bracing for climate risks now

"The uncertainty over the impact of climate change should not slow incorporation of climate risks into bank planning and supervision," Federal Reserve Governor Lael Brainard said on Thursday, as reported by Reuters.

Additional takeaways

"Financial firms should be bracing for climate risks now."

"Tools like scenario analysis being studied for possible use in supervision on climate risks."

"Physical risk from weather events may be hard to assess but shorter-term shifts in policy, for example, could lead to swift changes in asset prices."

"System would ultimately need standardized, reliable and mandatory disclosures on how firms are prepared to cope with climate risks."

Market reaction

These comments don't seem to be having a noticeable impact on the greenback's performance against its major rivals. As of writing, the US Dollar Index was down 0.35% on a daily basis at 90.63.